Regional SMEs outstripping rest of country

YORKSHIRE has some of the fastest growing small businesses in Britain, despite pressures caused by weak consumer confidence and the threat of a triple dip recession, according to a new study.

Suzy Brain England, the Institute of Directors’ regional chairman, said the findings were a testament to Yorkshire entrepreneurs’ strong work ethic, sound financial management and their ability to innovate.

The study, which was carried out on behalf of the Business Growth Fund (BGF), reveals that the highest regional UK SME (small and medium-sized enterprise) growth levels have been recorded in Yorkshire and the Humber.

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Despite the challenging economic conditions, 17.8 per cent of mid-sized SMEs based in Yorkshire are demonstrating “high levels of growth”, according to the latest Experian research commissioned by BGF.

According to BGF, this equates to 269 high-growth companies in our region, and is a 2.6 per cent increase from the 231 high-growth companies identified in Yorkshire and the Humber at this point last year. These companies have demonstrated aggregate growth of at least 33 per cent in the last three years.

Only London, where 19 per cent of mid-sized SMEs are classified as high growth, outperforms Yorkshire.

Andy Gregory, regional director for BGF in the North of England said yesterday: “This data is encouraging.

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“It shows that despite all the wider challenges posed by the macro-economic climate there has been more SME growth in Yorkshire and the Humber and across the UK as a whole.

“However, for real economic recovery, we need these growth figures to be higher and more broadly based.

“We need to see heightened levels of ambition and investment among business owners.

“One of the first questions that I ask an entrepreneur is, ‘Have they really accomplished all that they hoped for when they started their business?’

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“What could a robust, properly financed, business plan achieve over the next three, five or 10 years?

“Could the business double its workforce or treble turnover? Could it expand out of its home region through organic or acquisitive growth and develop a national or international footprint?

“Could it develop its supply chain, launch new products and increase exports to new overseas markets?

“Not enough growth capital is currently being channelled into UK SMEs.

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“Considering the possible number of good businesses seeking finance to support growth, this is a missed opportunity.”

Ms Brain England was encouraged by the positive Yorkshire figures.

She said: “For some time now, Yorkshire has tended to buck the national trend as SMEs, many of them family firms, have employed sound fiscal controls and the hard work ethic, to move their businesses slowly forward.

“It hasn’t been easy and there have been many setbacks, but slowly we are starting to see that the hard working, fiscally sound organisations, that operate with due diligence at all times, are thriving.

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“Closer inspection will probably reveal that they have reinvested in their people, and invested in research and development, and their management, to bolster their offering.”

BGF is an independent company with capital of up to £2.5bn, backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS, and Standard Chartered. BGF is managed autonomously with an independent management team.

Earlier this year, BGF, opened a new office in Leeds, as it seeks ambitious local entrepreneurs who need investment.